Gateway is already using the Chromatic chip in its Destination big-screen PC-TV. However, the Destination is not a high-volume sales item because of its price, which reachs as high as $5,000.

The inclusion of the chip in Gateway's more modestly priced desktop units will mean an increase in volume of Mpact-based DVD units over the Destination sales. Gateway will be including an Mpact media processor in DVD drive systems as a $199 option for all their multimedia desktops.

The agreement is a major victory for Chromatic Research, was has recently found itself facing increased competition for multimedia dollars with processor giant Intel.
This "shows people Mpact is worth buying chips from," notes Peter
Glaskowsky, an analyst at Microprocessor Report. For now, Glaskowsky says, Mpact has a significant advantage over Intel processors in the DVD arena.

Intel has been touting the advantages of its Pentium II processors for playback of DVD titles. Intel claims that its solution will be cheaper because no extra chips are necessary, as well as offer high performance.

But Glaskowsky notes that "the key thing about having another processor to do functions like DVD is that it doesn't matter how slow or loaded your main processor is." Intel, on the other hand, has to take into account the rest of the computer to do software-based DVD decoding. "Even though everything else is OK, if a user has a slow hard drive, you can't do playback. That's something very hard for Intel to predict."

Not only does Mpact already have the proper licensing for the antipiracy system used in DVD, but its systems are cheaper and easier to add to existing computers than Intel's solutions, Glaskowsky said. For now, he added, Mpact appears to have the advantage, with dependable, software based DVD two or three years down the road.

While Mpact is winning with DVD, it has yet to convince manufacturers to use its chip in other applications such as video cards. That may change later this year when they release the next generation of their Mpact multimedia processor.